Rolling blackouts have rationed Tunisian homes and factories through the summer, with the poultry, bottled water, and food processing sectors all but buckling under the losses. With no energy minister, no published plan, and no timeline, the state has begun letting those who can afford it buy their way off the grid.

Tunisia hasn’t commissioned a new electricity generating station since 2019. In the years before that, the country added one roughly every two years, while the plants it already ran aged out of their rated output, Sahar Mechmech, inclusive economies manager at TIMEP, tells EnterpriseAM. Consumption climbed through all of it.

This summer, the math caught up to reality. Rolling blackouts ran across the entire country — urban and rural, capital and interior — for weeks, alongside water cuts that followed directly from them, because Tunisia moves its water with electric pumps.

The size of the gap isn’t entirely clear, but the varying estimates agree on the shape of the issue, even as state utility STEG hasn’t published estimates. Saber Ammar, a researcher at the Transnational Institute, puts STEG’s output at roughly 4.5 GW against a peak that touched 6 GW. Adam Gharmoul, risk analyst at Dispatch Risk Advisory, has similar figures, putting available capacity near 4.6 GW against a peak around 6.4 GW. Local reporting through the July heatwave has cited a narrower gap, closer to 4 GW against a 5 GW peak. The consensus remains that available capacity has barely moved in six years, while peak demand keeps setting records.

This summer’s rolling blackouts came as consumption rose above their usual levels amid an unprecedented heat wave, and STEG adopted load shedding as a measure to ration electricity amid peak consumption during the summer season. The frequency, duration and geographical reach of this year’s cuts, she says, “have been the biggest that we’ve seen in recent years,” Mechmech tells us.

The load shedding is deliberate rationing to prevent an uncontrolled failure. “They cut electricity to residential areas so that a total blackout doesn't happen,” Ammar says.

Someone asked for the plants. STEG’s trade union has for several years pressed the Industry and Energy Ministry to authorize four generating stations under the national energy transition strategy — Skhira 1 and 2, and Bizerte 1 and 2, Gharmoul tells us. The union says it never received an answer.

Why nothing got built

STEG’s balance sheet is the near-term answer, and it is close to symmetrical: The utility carried TND 7.36 bn (USD 2.53 bn) of debt as of 23 June, against TND 6.06 bn (USD 2.08 bn) owed to it by public and private customers. A utility owed nearly as much as it owes has no capacity to fund a generating station.

Two things put it in this situation. Tunisia sells electricity below cost, and since 2015 the difference has sat on STEG’s own books rather than the state’s. “It produced electricity at TND 0.10 and sold it at TND 0.05,” Ammar says. “In 2015, subsidies were lifted, meaning the gap between production cost and sale price had to be borne by the company alone.” The second issue is arrears: Public entities have not paid their bills, and the state has not paid the operating subsidy on schedule, Gharmoul says.

Mechmech reads the subsidy question differently. Tunisia’s residential tariff is progressive — the more you consume, the more you pay per kilowatt — which she describes as sound design that has room to go further, with a consumption threshold above which the subsidy disappears entirely. In her analysis, the fiscal driver of the crisis is the missing investment, and she does not attribute it to the subsidy.

The borrowing capacity went somewhere. That somewhere is ELMED, the EUR 850 mn subsea interconnector that will link Tunisian and Italian transmission networks, now under construction and due to energize around 2028. “We took massive loans that should have been directed toward building new power generation plants, but instead we took loans to build ELMED,” Ammar says. TNI’s study of the project argues its practical function will be importing power into a deficit rather than exporting from a surplus.

Ammar also points to a 2019 loan from the French Development Agency intended to fund STEG-built renewables, which he says the International Cooperation Ministry asked the agency to withhold on the grounds that the projects belonged in a public-private partnership. “It’s not about lack of finance, it’s about the policy,” he says.

What the gap costs

Poultry took the worst of it. Ventilation and cooling run on mains power, and unannounced outages pushed shed temperatures up fast. Losses of 50-90% of flocks were reported in parts of Bizerte and Sousse, with generators overheating or failing after prolonged use, Gharmoul says. In El-Fahs, southwest of Tunis, the losses from dead birds are estimated at TND 1.4-1.5 mn (USD 480k-520k), Arab News reported. Ammar expects the supply effect to reach consumers within two to three months.

Bottled water is short for two reasons at once. Outages cut plant runtimes through the season’s peak demand, and distributors came into summer holding less stock than usual. Amendments to the Commercial Code that came into effect in February 2025 tightened cheque controls and routed verification and fund reservation through digital platform Tunichèque, removing the post-dated cheque as the working-capital instrument distributors had used to buy heavily in winter and settle after summer sales. Tighter anti-hoarding enforcement discouraged what buffer remained.

Water supply more broadly tracks the grid. The Tunisian Water Observatory logged 608 supply-disruption reports in July, 549 of them unannounced cut-offs and distribution failures, describing a critical water emergency.

Food processing and export-oriented manufacturing are carrying interrupted production and generator costs against tight margins, Gharmoul says. Restaurants, pharmacies and small retailers have lost equipment to surges when power returns and lost stock to heat during the cuts, Mechmech says.

Hospitals have no separate feed. Most hold backup generators, some of which no longer work. In one case, doctors off shift were called in to manually ventilate NICU babies, Mechmech says.

Tourism is the lagging exposure. Receipts this season may hold, but Mechmech expects the reputational effect to show up in the next one, when travelers price in the risk of a fortnight of daily cuts.

Household finances are absorbing the rest. Remittances have risen over recent months, Mechmech says, and the money is going to consumption to cover the gap in household purchasing power rather than into investment.

The exit

STEG held a legal monopoly on generation. Households with rooftop solar were obliged to feed it into the network and take the value back as a bill credit. That has changed. Because STEG cannot deliver, regulators now permit private households to run generators and to store their own solar for use during outages.

“This sets an interesting and dangerous precedent: A state institution basically admitting it cannot provide for the population,” Mechmech says. “It says, ‘If you’re rich enough, you can afford your own solution,’ while leaving poor households behind.”

The uptake is running toward fossil-fuel generators rather than panels and batteries, on upfront cost. Businesses without visibility on when the cuts end are buying whatever restores continuity fastest.

The same logic is producing a market in decentralized utilities. Kumulus Water, founded in Tunis in 2021, sells machines that condense drinking water from humidity and can run on dedicated solar and batteries, bypassing both the grid and the pipe network. Its pitch is built on the failure of centralized distribution: Physical losses run 20% in France and 30% in Spain, and reach 50% in Tunisia and Algeria, co-founder and CEO Iheb Triki tells us — half of every liter produced never arrives.

The company has around 50 clients and more than 200 machines deployed, Triki says, among them PwC, Ernst & Young, and Aéroport de Paris, which runs the Monastir and Enfidha airports and needs summer drinking water for roughly 500 staff. Triki puts the delivered cost at about USD 0.15 per liter, which he says runs 30-50% below what those clients were paying for bottled supply.

“If you have your PV panels and batteries, you know how much your electricity will cost, irrespective of wars and economic struggles in other countries,” Triki says. He frames it as sovereignty — for a buyer with capital, that is what it is. A machine, panels and storage is a private grid, and the reliability it delivers is reliability the state is no longer supplying.

Slow to close

Generation takes five to ten years from tender to operation, Triki — who previously advised the energy minister and spent seven years in renewables private equity — tells us. The projects approved this April are at the start of that cycle, but the cycle is already fraught with problems. In April, parliament approved five utility-scale solar concessions totaling roughly 598 MW and TND 1.64 bn (USD 560 mn) across Sidi Bouzid, Gafsa, and Gabès, all selling exclusively to STEG. Hours before the vote, President Kais Saied dismissed Energy Minister Fatma Thabet, and has yet to appoint a replacement while Housing and Infrastructure Minister Salah Eddine Zouari holds the portfolio on an interim basis.

“I think renewables are the solution for Tunisia, but they need to be done right,” Mechmech says. “Otherwise, it’s going to be a false solution.”

Ammar argues solar misses the failure mode. “The crisis also occurs at night when there is no solar power,” he says. He also puts around 70% of Tunisia's energy import bill in refined transport fuels rather than electricity, and wants generation built by the public utility or by citizens on rooftops.

Background: Tunisia imports about 60% of its gas, primarily from Algeria, and burns it for 90-95% of generation. Renewables are about 3% of the mix against a 35% target for 2030.

The fiscal position is tightening around all of this. The 2026 budget was drafted on oil at USD 63, while Brent has been trading above 90. The budget deficit is projected at TND 11 bn, or 6% of GDP, with public debt above 80% of GDP limiting access to external markets, Gharmoul says. Reserves have slipped from around 100 days of imports to roughly 90, and the central bank now requires imports to be financed in cash, a threshold most SMEs cannot meet.

What now?

Extreme heat is expected to continue over the coming years so electricity demand and pressure on the national grid is unlikely to ease. “Businesses should therefore expect power disruptions to remain at a recurring risk, particularly during periods of high temperatures and peak demand,” Gharmoul tells us.

“We haven’t seen any plan or communication from the government on the logic behind all of these cuts,” nor what is being done to prevent a repeat next summer, Mechmech says. Dispatch Risk Advisory doesn’t see year-round load-shedding as its baseline scenario, with Gharmoul saying “the more immediate concern is that power cuts could become more frequent and prolonged.”

For businesses, the planning assumption is unchanged either way. “People are losing trust in the national grid, public institutions, and the government,” Mechmech says. “It’s not just an economic crisis; it’s a social and political crisis of trust.”